Measuring the Madness: Negative Economic Impact of the NCAA Tournament

It's like clockwork. Every year, perfectly on cue, Selection Sunday comes around and the same slew of articles claim March Madness is responsible for million$ and million$ in lost worker output. Sure, people only spend a few minutes out of their day checking scores or striking up a conversation at the water cooler, but, according to the research firm Challenger, Gray & Christmas Inc., it's adds up to a whopping $1.8 billion dollars of negative economic impact. All in all, one-tenth of what the new jobs bill is going to cost us.

Of course, college basketball distractions run from the break room all the way up to the White House. The commander-in-chief is the most prominent subject of criticism for wasting time on bracketology. President Obama's highly anticipated bracket was revealed on Wednesday after endless debate over who he would pick to win it all. Even Mike Kryzyzewski, coach of the Duke University's men's basketball team, jokingly told reporters last March that Obama should probably focus on the economy rather than on filling out a bracket, though he may have been slightly biased after Obama picked rival team University of North Carolina to win last year's championship.

At my school, Duke, where kids have been known to sleep outside in the middle of winter for tickets, basketball is a never-ceasing presence. This year, one Duke professor raised the bar by joining the debate over work habits during the tournament.

Charles Clotfelter, a professor at the Sanford School of Public Policy, collected data from 78 research libraries across the U.S. to measure the relative difference between the number of articles viewed before the tournament and during the tournament. Predictably, he found that there was a significant difference; library usage clearly dipped after the brackets were announced. He attributes this decline to the "water cooler effect," where people are enormously influenced by the power of the media and spend time talking about or researching the tournament.

Clotfelter also found interesting results in what he calls the "partisan fan effect," where winning schools continued to experience a decrease in library usage, while fans of losing teams resumed work after their team lost.Students at the winning schools may have reason to celebrate initially, but they'll probably regret it a week later when they're pulling all-nighters in the library.

Clotfelter's research would at first appear to corroborate the annual Challenger report, where productivity lost is calculated based on an average $18-an-hour wage and the estimation that the average person spends about 20 minutes per day following the action online.

But, like other critics of the Challenger report, Clotfelter would disagree with these rigid, mechanical conclusions and argue that other factors should be considered. "There is a shifting around of work," he said, and we can't say that the worker who spends a bit of extra time looking at scores one day won't work harder the next day to make up for it. Clotfelter also thinks that claims of lost productivity do not take into account the positive effects March Madness has on morale, noting that "the office that bets together may work better together."

Even at the Armadillo Grill, a Tex-Mex restaurant and student hot spot during the tournament season, March Madness creates few distractions for the staff. Erika Garris, manager of the Armadillo Grill, says she really looks forward to March Madness every year. Though it is one of their busiest times, the workers love coming in and being able to tease their co-workers about which team lost last night. "You want to come into work," she said, stressing that betting pools have never been an issue. Most Armadillo workers aren't hardcore basketball fans, she said, and the ones who are will watch the games at home on their own time.

Office betting pools, which are in fact illegal, are banned at approximately one-third of workplaces, according to survey work done by the Society for Human Resources Management. So while employers may be concerned about their workers participating in illegal gambling, reports of lost productivity may be overblown.

Here at Duke, where we live and breathe basketball, if we hadn't figured out how to work around games, there's no doubt that we'd all be in very bad shape indeed. At the very least, I can feel slightly better about my tournament-induced procrastination knowing that everyone on campus will be joining me in the library come April 5. Small comfort, yes, but appreciated nonetheless.

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